U.S. Securities and Exchange Commission
                             Washington, D.C. 20549

                                   Form 10-QSB

             QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

For the quarter ended: August 31, 2000
Commission file no.:  0-26581

                            DERMATOLOGY SYSTEMS, INC.
          ------------------------------------------------------------
                 (Name of Small Business Issuer in its Charter)

         Florida                                           65-0844181
------------------------------------                   -----------------------
(State or other jurisdiction of                        (I.R.S.Employer
incorporation or organization)                         Identification No.)

222 Lakeview Avenue Suite 113
West Palm Beach, FL                                           33401
------------------------------------------             -----------------------
(Address of principal executive offices)                   (Zip Code)

Issuer's telephone number: (561) 832-5699


Securities to be registered under Section 12(b) of the Act:

     Title of each class                             Names of each exchange
                                                       on which registered
         None
---------------------------------                   ----------------------------

Securities to be registered under Section 12(g) of the Act:

                    Common Stock, $.0001 par value per share
            --------------------------------------------------------
                                (Title of class)

Copies of Communications Sent to:
                              Donald F. Mintmire
                              Mintmire & Associates
                              265 Sunrise Avenue, Suite 204
                              Palm Beach, FL 33480
                              Tel.: (561) 832-5696 - Fax: (561) 659-5371





<PAGE>



Indicate by Check whether the issuer (1) filed all reports  required to be filed
by  Section  13 or 15(d) of the  Exchange  Act during the past 12 months (or for
such shorter periods that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.

                           Yes  X     No
                               ---       ---

         As of August 31, 2000,  there are  2,000,000  shares of voting stock of
the registrant issued and outstanding.

PART I

Item 1.           Financial Statements


                          INDEX TO FINANCIAL STATEMENTS



Balance Sheets......................................................F-2

Statements of Operations............................................F-3

Statements of Stockholders' Equity..................................F-4

Statements of Cash Flows............................................F-5

Notes to Financial Statements.......................................F-6



















<PAGE>




<TABLE>
<CAPTION>
                            Dermatology Systems, Inc.
                        (A Development Stage Enterprise)
                                 Balance Sheets



                                                                  February 29,      August 31,
                                                                      2000             2000
                                                                ---------------- ----------------
                                                                                   (unaudited)
<S>                                                             <C>              <C>
                                   ASSETS
CURRENT ASSETS
   Cash                                                         $         36,900 $         28,140
                                                                ---------------- ----------------

     Total current assets                                                 36,900           28,140
                                                                ---------------- ----------------

Total Assets                                                    $         36,900 $         28,140
                                                                ================ ================

                    LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
   Accrued expenses                                             $          2,000 $              0
   Accrued expenses - related party                                        3,000            3,000
                                                                ---------------- ----------------

     Total current liabilities                                             5,000            3,000
                                                                ---------------- ----------------

Total Liabilities                                                          5,000            3,000
                                                                ---------------- ----------------

STOCKHOLDERS' EQUITY
Preferred stock, $0.0001 par value, authorized 10,000,000
   shares, none issued                                                         0                0
Common stock, $0.0001 par value, authorized 50,000,000
   shares; 2,000,000 issued and outstanding                                  200              200
Additional paid-in capital                                                49,900           49,900
Deficit accumulated during the development stage                         (18,200)         (24,960)
                                                                ---------------- ----------------

Total Stockholders' Equity                                                31,900           25,140
                                                                ---------------- ----------------

Total Liabilities and Stockholders' Equity                      $         36,900 $         28,140
                                                                ================ ================
</TABLE>










               The accompanying notes are an integral part of the
                             financial statements.


                                       F-2

<PAGE>





<TABLE>
<CAPTION>
                            Dermatology Systems, Inc.
                        (A Development Stage Enterprise)
                            Statements of Operations
                                   (Unaudited)



                                                                                                           Period from
                                                 Three Months Ended          Six Months Ended              May 21, 1998
                                                     August 31,                 August 31,                 (Inception)
                                              -------------------------    ---------------------------       through
                                               2000           1999           2000            1999         August 31, 2000
                                              ----------    -----------    ------------    -----------    ----------------
<S>                                           <C>           <C>            <C>             <C>            <C>
Revenues                                      $        0    $         0    $          0    $         0    $              0
                                              ----------    -----------    ------------    -----------    ----------------

Expenses
    General and administrative                        10              0              10             20               2,436
    Consulting fees - related party                    0              0               0              0                 100
    Consulting fees                                2,000              0           2,000              0               4,000
    Professional fees                                750          1,400           4,750          1,400              15,424
    Professional fees - related party                  0              0               0              0               3,000
                                              ----------    -----------    ------------    -----------    ----------------

            Total expenses                         2,760          1,400           6,760          1,420              24,960
                                              ----------    -----------    ------------    -----------    ----------------

Net loss                                      $   (2,760)   $    (1,400)   $     (6,760)   $    (1,420)   $        (24,960)
                                              ==========    ===========    ============    ===========    ================

Net loss per weighted average share, basic    $ (0.01)      $   (0.01)     $   (0.01)      $   (0.01)
                                              ==========    ===========    ============    ===========

Weighted average number of shares              2,000,000      2,000,000       2,000,000      2,000,000
                                              ==========    ===========    ============    ===========
</TABLE>












               The accompanying notes are an integral part of the
                             financial statements.


                                       F-3

<PAGE>






<TABLE>
<CAPTION>
                            Dermatology Systems, Inc.
                        (A Development Stage Enterprise)
                           Statements of Stockholders'
                   Equity Period from May 21, 1998 (Inception)
                             through August 31, 2000





                                                                                           Deficit
                                                                                         Accumulated
                                                                           Additional    During the          Total
                                                   Number of     Common     Paid-in      Development     Stockholders'
                                                     Shares      Stock      Capital         Stage           Equity
                                                  ------------ ---------- ------------ ---------------  ---------------
<S>                                               <C>          <C>        <C>          <C>              <C>
BEGINNING BALANCE,
May 21, 1998 (inception)                                     0 $        0 $          0 $             0  $             0

Year Ended February 28, 1999:
----------------------------
   May 1998 - services ($0.0001/sh)                  1,000,000        100            0               0              100
   May 1998 - cash ($0.05/sh)                          565,000         57       28,193               0           28,250
   June 1998 - cash ($0.05/sh)                         371,000         37       18,513               0           18,550
   July 1998 - cash ($0.05/sh)                           4,000          0          200               0              200
   September 1998 - cash ($0.05/sh)                     60,000          6        2,994               0            3,000

Net loss                                                     0          0            0         (13,891)         (13,891)
                                                  ------------ ---------- ------------ ---------------  ---------------

BALANCE, February 28, 1999                           2,000,000        200       49,900         (13,891)          36,209

Year Ended February 29, 2000:
----------------------------

Net loss                                                     0          0            0          (4,309)          (4,309)
                                                  ------------ ---------- ------------ ---------------  ---------------

BALANCE, February 29, 2000                           2,000,000        200       49,900         (18,200)          31,900

Six Months Ended August 31, 2000: (unaudited)
--------------------------------

Net loss                                                     0          0            0          (6,760)          (6,760)
                                                  ------------ ---------- ------------ ---------------  ---------------

ENDING BALANCE, August 31, 2000
(unaudited)                                          2,000,000 $      200 $     49,900 $       (24,960) $        25,140
                                                  ============ ========== ============ ===============  ===============
</TABLE>











               The accompanying notes are an integral part of the
                             financial statements.


                                       F-4

<PAGE>






<TABLE>
<CAPTION>
                            Dermatology Systems, Inc.
                        (A Development Stage Enterprise)
                            Statements of Cash Flows
                        Six Months Ended August 31, 2000
                                   (Unaudited)



                                                                                               Period from
                                                                                               May 21, 1998
                                                                                               (Inception)
                                                                                                 through
                                                               2000           1999           August 31, 2000
                                                             -------------  -------------  ------------------
<S>                                                          <C>            <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss                                                     $      (6,760) $      (1,420) $        (24,960)
Adjustments to reconcile net loss to net cash used by
operating activities:
       Stock issued for services - related party                         0              0               100
Changes in operating assets and liabilities:
       Increase (decrease) in accrued expenses                      (2,000)        (4,500)                0
       Increase (decrease) in accrued expenses - related party           0              0             3,000
                                                             -------------  -------------  ----------------

Net cash used by operating activities                               (8,760)        (5,920)          (21,860)
                                                             -------------  -------------  ----------------

CASH FLOWS FROM INVESTING ACTIVITIES:
       None                                                              0              0                 0
                                                             -------------  -------------  ----------------

Net cash used by investing activities                                    0              0                 0
                                                             -------------  -------------  ----------------

CASH FLOWS FROM FINANCING ACTIVITIES:
     Proceeds from issuance of common stock                              0              0            50,000
                                                             -------------  -------------  ----------------

Net cash provided by financing activities                                0              0            50,000
                                                             -------------  -------------  ----------------

Net increase (decrease) in cash                                     (8,760)        (5,920)           28,140

CASH, beginning of period                                           36,900         43,832                 0
                                                             -------------  -------------  ----------------

CASH, end of period                                          $      28,140  $      37,912  $         28,140
                                                             =============  =============  ================
</TABLE>








               The accompanying notes are an integral part of the
                             financial statements.


                                       F-5

<PAGE>



                            Dermatology Systems, Inc.
                        (A Development Stage Enterprise)
                          Notes to Financial Statements
                   (Information with respect to the six months
                  ended August 31, 2000 and 1999 is unaudited)

(1) Summary of Significant Accounting Principles
      TheCompany Dermatology  Systems,  Inc. is a Florida chartered  development
         stage corporation which conducts business from its headquarters in West
         Palm Beach,  Florida. The Company was incorporated on May 21, 1998, and
         has elected February 28 as its fiscal year end.

         The  Company  has not  yet  engaged  in its  expected  operations.  The
         Company's future  operations will be to provide certain  treatments for
         skin diseases. Current activities include raising additional equity and
         negotiating  with potential key personnel and  facilities.  There is no
         assurance  that any  benefit  will  result  from such  activities.  The
         Company will not receive any operating  revenues until the commencement
         of operations,  but will nevertheless  continue to incur expenses until
         then.

         The  financial   statements  have  been  prepared  in  conformity  with
         generally accepted  accounting  principles.  In preparing the financial
         statements,  management is required to make  estimates and  assumptions
         that affect the reported  amounts of assets and  liabilities  as of the
         date of the statements of financial condition and revenues and expenses
         for the period then ended. Actual results may differ significantly from
         those estimates.

         The following  summarize the more significant  accounting and reporting
policies and practices of the Company:

         a) Start-up costs Costs of start-up activities,  including organization
         costs,  are  expensed as  incurred,  in  accordance  with  Statement of
         Position (SOP) 98-5.

         b) Net loss per share  Basic  net loss per  weighted  average  share is
         computed by dividing  the net loss by the  weighted  average  number of
         common shares outstanding during the period.

         c) Stock  compensation for services  rendered The Company issues shares
         of common  stock in exchange for  services  rendered.  The costs of the
         services  are  valued  according  to  generally   accepted   accounting
         principles and have been charged to operations.

         d) Interim financial  information The financial  statements for the six
         months  ended  August 31, 2000 and 1999 are  unaudited  and include all
         adjustments  which in the opinion of management  are necessary for fair
         presentation,  and  such  adjustments  are of a  normal  and  recurring
         nature.  The  results for the six months are not  indicative  of a full
         year results.

(2)      Stockholders'  Equity The Company has authorized  50,000,000  shares of
         $0.0001 par value common stock,  and  10,000,000  shares of $0.0001 par
         value preferred stock. Rights and privileges of the preferred stock are
         to be  determined by the Board of Directors  prior to issuance.  On May
         21, 1998, the Company issued a total of 1,000,000  restricted shares to
         its  President  and  Treasurer  for the value of  services  rendered in
         connection  with the  organization  of the  Company.  In May 1998,  the
         Company  sold 565,000  shares of common  stock for $28,250 in cash.  In
         June 1998,  the Company sold 371,000 shares of common stock for cash of
         $18,550.  In July 1998,  the Company  sold 4,000 shares of common stock
         for cash of $200. In September  1998, the Company sold 60,000 shares of
         common stock for cash of $3,000.

(3)      Income Taxes Deferred income taxes  (benefits) are provided for certain
         income and expenses which are  recognized in different  periods for tax
         and financial  reporting  purposes.  The Company has net operating loss
         carry-  forwards  for income tax  purposes  of  $25,000,  with  $13,900
         expiring in 2019, $4,300 expiring in 2020 and $6,800 expiring in 2021.

                                       F-6

<PAGE>



                            Dermatology Systems, Inc.
                        (A Development Stage Enterprise)
                          Notes to Financial Statements


(3)      Income Taxes  (Continued) The amount recorded as deferred tax assets as
         of August 31, 2000 is approximately $3,750, which represents the amount
         of tax benefit of the loss carryforward.  The Company has established a
         100%  valuation  allowance  against  this  deferred  tax asset,  as the
         Company has no history of profitable operations.

(4)      Going Concern The accompanying  financial statements have been prepared
         assuming  that  the  Company  will  continue  as a going  concern.  The
         Company's  financial  position and operating  results raise substantial
         doubt about its ability to continue as a going concern, as reflected by
         the net  loss of  $25,000  accumulated  from May 21,  1998  (inception)
         through  August 31,  2000.  The ability of the Company to continue as a
         going concern is dependent upon commencement of operations,  developing
         sales, and obtaining  additional  capital and financing.  The financial
         statements  do not include any  adjustments  that might be necessary if
         the Company is unable to continue  as a going  concern.  The Company is
         currently seeking  additional  capital to allow it to begin its planned
         operations.

(5)      Related Parties Counsel to the Company indirectly owns 80,000 shares of
         the  Company's  common stock  through the sole  ownership of the common
         stock of another company which invested in the Company. Also, counsel's
         adult son owns 80,000 shares in the Company.  The  Company's  president
         owns a 42.5% interest in the Company, consisting of 850,000 shares, and
         the treasurer owns a 7.5% interest, consisting in 150,000 shares.

         During the period since  inception,  the Company incurred certain legal
         and  consulting  fees from  related  parties,  in the amount of $3,100.
         Professional  services  rendered  by the  Company's  legal  counsel and
         shareholder  amounted to $3,000 and is presented in Professional fees -
         related party.  Consulting services rendered by the Company's secretary
         and treasurer  amounted to $100 and is presented in  Consulting  fees -
         related  party.  Legal counsel paid certain  miscellaneous  expenses on
         behalf of the Company,  amounting to $123. Unpaid amounts at August 31,
         2000 are $3,000 and are presented in Accrued expenses - related party.














                                       F-7

<PAGE>



Item 6. Management's Discussion and Analysis or Plan of Operation

         Plan of Operations

         Since its inception,  the Company has conducted no business  operations
except for organizational and capital raising activities. For the quarter ending
August  31,  2000 and 1999,  the  Company  had no  income  from  operations  and
accumulated  operating  expenses of $2,760 and $1,400  respectively,  and losses
from  operations  of $2,760 and $1,400  respectively.  The  Company  proposes to
profitably  participate in the recent trend in the  medical/cosmetic  removal of
blemishes  through the use of laser  technology  and,  specifically  through the
application  of Photo Therapy  Resonancy  technology  (otherwise  referred to as
"PTR").

         Dr. Pierre  Haouzi,  61 years old, is a graduate of the Paris School of
Medicine,  specializing in Biology and is Licensed to practice general medicine.
He has a specialty in Sports Medicine and Traumatology and in 1979 was certified
by the Country of France.  Dr. Haouzi has testified numerous times in court as a
medical expert. He also holds a certification in Homeopathy and Accupuncture. In
June 1995 Dr. Haouzi resigned his position managing retirement homes and private
clinics.  In 1996 he assumed  the  position  of Medical  Director of Lasertec of
France's research and development of laser therapy for the specialized treatment
of cancer.

         Dr. Haouzi has applied  portions of his training to his recent research
and development of laser technology therapy.  While the research and development
has been focused on specialized treatment of cancer and many benefits from laser
application have been discovered,  refined and applied to the areas in which the
Company will market its services.  Dr. Haouzi has been  authorized and permitted
to  develop  this  additional  technology  while  engaged  in his  research  and
development  for the  specialized  treatment  of  cancer.  Such  forms of cancer
researched to which PTR  technology  may apply  includes  cancer of the bladder,
skin cancer and cancer of the vocal  chords.  In some respects the areas overlap
and the  cancer  research  has  developed  new  methods of  treatment  and laser
application for the areas in which the Company will engage.  Dr. Haouzi has been
a key  researcher  for  Lasertec of France,  was  authorized  and  permitted  by
Lasertec of France to develop additional  technology while doing cancer research
and  has a  verbal  commitment  from  Lasertec  of  France  which  owns  the PTR
technology  that  he is  permitted  to  utilize  such  technologies  in his  own
business.  The specific terms of the license is under discussion and the Company
expects a written  agreement  with  respect to the  technology  in the very near
future.

         Subsequent to the submission of PTR for FDA approval management intends
to  explore  all  available  alternatives  for  debt  and/or  equity  financing,
including but not limited to additional private and public securities offerings.
Management  anticipates  that it will be able to satisfy  its cash  requirements
through its 2001 fiscal year end without  raising  funds via debt and/or  equity
financing or from third party funding sources.  Accordingly,  management expects
that it will be  necessary  for DSI to raise  additional  funds  within the next
twelve (9) months, commencing approximately nine(6) months from the date hereof.

          Dr.  Haouzi,  at  least  initially,  will be  solely  responsible  for
developing DSI's medical laser sales business.  However,  at such time, if ever,
as sufficient operating capital becomes available,  management expects to employ
additional staffing and marketing personnel. In addition, the Company expects to
continuously engage in market research in order to monitor new market trends and
other critical information deemed relevant to DSI's business.


<PAGE>




         Financial Condition, Capital Resources and Liquidity

         At August 31,  2000,  the  Company  had  assets  totaling  $28,140  and
liabilities   of  $3,000  .  The  increase  in  the  Company's   liabilities  is
attributable  to increased  consulting  and  professional  fees  rendered by the
Company's legal counsel and shareholder.  Since the Company's inception,  it has
received $50,000 in cash contributed as consideration for the issuance of shares
of Common Stock.

         DSI's  working  capital is  approximately  $28,140  and there can be no
assurance that the Company's  financial  condition will improve.  The Company is
expected  to  continue  to have  minimal  working  capital or a working  capital
deficit as a result of current liabilities.

         The ability of the Company to continue as a going  concern is dependent
upon its ability to obtain a licensing  arrangement with the manufacturer of PTR
medical  lasers,  submitting PTR for FDA approval,  and then finding clients who
will purchase it.

         To implement  such plan,  also during this initial  phase,  the Company
intends to initiate a self- directed  private  placement under Rule 506 in order
to raise an additional $300,000. In the event such placement is successful,  the
Company  believes  that it will have  sufficient  operating  capital to meet the
initial expansion goals and operating costs through its 2001 fiscal year end. In
the event the  Company is not  successful  in raising  such  funds,  the Company
believes  that it will not be able to continue  operations  past a period of six
months beyond its 2001 fiscal year end.

         Net Operating Losses

         The Company has net  operating  loss  carry-forwards  of $25,000,  with
$13,900,  $4,300 and $6,800  expiring in 2019, 2020 and 2021  respectively.  The
Company has as of August 31, 2000 a $3,750 deferred tax asset resulting from the
loss  carry-forwards,  for which it has established a 100% valuation  allowance.
Until the Company's current operations begin to produce earnings,  it unclear as
to the ability of the Company to utilize such carry-forwards.

         Year 2000 Compliance

         The Company has not  experienced  a material  impact as a result of the
YEAR 2000  event and does not  anticipate  that it will  experience  a  material
impact to the Company's  operations  or financial  condition in the future since
all of the  internal  software  developed  and  utilized by the Company has been
upgraded to support Year 2000 versions.


Forward-Looking Statements

         This Form  10-QSB  includes  "forward-looking  statements"  within  the
meaning of Section 27A of the  Securities  Act of 1933, as amended,  and Section
21E of the Securities  Exchange Act of 1934, as amended.  All statements,  other
than  statements of historical  facts,  included or incorporated by reference in
this Form 10-QSB which  address  activities,  events or  developments  which the
Company expects or anticipates  will or may occur in the future,  including such
things as future


<PAGE>



capital  expenditures  (including  the  amount  and  nature  thereof),  business
strategy,  expansion and growth of the Company's  business and  operations,  and
other such matters are forward-looking statements. These statements are based on
certain  assumptions and analyses made by the Company in light of its experience
and its perception of historical trends,  current conditions and expected future
developments  as well as  other  factors  it  believes  are  appropriate  in the
circumstances. However, whether actual results or developments will conform with
the Company's  expectations  and predictions is subject to a number of risks and
uncertainties,  general  economic market and business  conditions;  the business
opportunities  (or lack  thereof)  that may be  presented  to and pursued by the
Company;  changes in laws or regulation;  and other  factors,  most of which are
beyond the  control of the  Company.  Consequently,  all of the  forward-looking
statements made in this Form 10-QSB are qualified by these cautionary statements
and  there  can  be  no  assurance  that  the  actual  results  or  developments
anticipated by the Company will be realized or, even if substantially  realized,
that they will have the expected consequence to or effects on the Company or its
business or  operations.  The Company  assumes no obligations to update any such
forward-looking statements. The Safe Harbor provisions referred to herein do not
apply to the Company until the Company is subject to the reporting  requirements
of Section 13(a) or Section 15(d) of the Exchange Act.


PART II

Item 1. Legal Proceedings.

     The  Company  knows  of no legal  proceedings  to which it is a party or to
which any of its  property  is the  subject  which are  pending,  threatened  or
contemplated or any unsatisfied judgments against the Company.

Item 2. Changes in Securities and Use of Proceeds

         None

Item 3. Defaults in Senior Securities

         None

Item 4. Submission of Matters to a Vote of Security Holders.

         No matter was  submitted  during the quarter  ending  August 31,  2000,
covered by this  report to a vote of the  Company's  shareholders,  through  the
solicitation of proxies or otherwise.

Item 5.           Other Information

         None

Item 6. Exhibits and Reports on Form 8-K

     (a) The exhibits  required to be filed  herewith by Item 601 of  Regulation
         S-B, as described in the following index of exhibits,  are incorporated
         herein by reference, as follows:


<PAGE>




Exhibit No.     Description
---------------    -------------------------------------------------------
3(i).1            Articles of Incorporation of DSI filed May 21, 1998(1)

3(ii).1           By-laws (1)

27       *        Financial Data Schedule

----------------

(1)  Incorporated herein by reference to the Company's Registration Statement on
     Form 10-SB. and subsequent amendments filed thereto.

*        Filed herewith

     (b) No Reports on Form 8-K were filed  during the quarter  ended August 31,
2000.

                                   SIGNATURES
                                   ----------

         In  accordance  with  Section  13 or 15(d)  of the  Exchange  Act,  the
registrant  caused  this  report to be signed on its behalf by the  undersigned,
hereunto duly authorized.

                       DERMATOLOGY SYSTEMS, INC.
                             (Registrant)

Date                          Signature
----                          ---------

 October 15, 2000             By: /s/ Dr.  Pierre Haouzi
                              -----------------------------
                                 Dr. Pierre Haouzi
                                 President and Director